Harmonic patterns: Gartley, Bat, Butterfly, Crab and Cypher (XABCD)

The idea in plain words

Harmonic patterns combine swings and Fibonacci ratios. When the swings X-A-B-C-D line up with the right ratios, D is an area where the market has often turned. The tool measures the ratios and names the pattern if they match.

How it is calculated

Click X, A, B, C and D. The tool shows AB as a fraction of XA, BC of AB, CD of BC and XD (how far D is from A, measured against XA), then checks the patterns. While you place D, dotted lines show where D would complete each pattern that still fits. Once a pattern is recognised, it draws the targets T1 and T2 (38.2% and 61.8% of the AD leg, measured back from D) in green and the stop in red: beyond X for a Gartley, Bat or Cypher, beyond the next Fibonacci extension of XA for a Butterfly or Crab.

Gartley: AB 0.618 XA; D at 0.786 XA
Bat: AB 0.382–0.5 XA; D at 0.886 XA
Butterfly: AB 0.786 XA; D at 1.27–1.618 XA (beyond X)
Crab: AB 0.382–0.618 XA; D at 1.618 XA
Deep Crab: AB 0.886 XA; D at 1.618 XA
Cypher: C at 1.272–1.414 XA (beyond A); D at 0.786 of XC
BC is usually 0.382–0.886 of AB; CD extends 1.13–3.618 of BC depending on the pattern

How to use it

• A bullish pattern (D below C) suggests looking for buys near D, with a stop beyond X or the pattern's limit.
• Targets are usually 38.2% (T1) and 61.8% (T2) of the AD leg back from D; many traders take part of the profit at T1.

Drawing conclusions

• "No standard harmonic match" means the swings do not fit the textbook ratios; the shape may still be useful as structure.

Watch out for

• Patterns are only valid once D is reached; drawing D in advance is a projection.
• Exact ratios are rare; the tool allows a small tolerance.

A little history

H. M. Gartley described the original pattern in "Profits in the Stock Market" (1935). Larry Pesavento added Fibonacci ratios; Scott Carney named and defined the Bat and the Crab around 2000–2001; the Butterfly is credited to Bryce Gilmore and the Cypher to Darren Oglesbee.